Soviet rival? Norway steps up deals for gas with energy-hungry Europe

ByGary Yerkey, Special to The Christian Science MonitorSeptember 9, 1982

Brussels
— With little fanfare, Norway has begun to sign new contracts guaranteeing stepped-up shipments of natural gas to Western Europe over the next decade.

The Reagan administration - which has been badgering Norway to increase deliveries southward to help offset Western Europe's ''overdependence'' on the Soviet Union - has just as quietly welcomed the development.

According to European Community (EC) energy experts, Norway will rival Moscow as Western Europe's principal foreign source of natural gas by 1990, meeting about 15 percent of gas consumption requirements, against about 20 percent for the Soviet Union.

Beginning what is expected to become a trend, Norway's state-owned energy company, Statoil, earlier this month signed a contract with seven gas companies in France, West Germany, the Netherlands, and Belgium.

In 1986, Statoil will begin to supply 3.5 billion cubic meters (4.585 billion cubic yards at 1.31 cubic yards per cubic meter) of natural gas a year in addition to the 30 billion cubic meters per year it furnishes today. Other contracts totaling 12 billion cubic meters per year are in the works, according to industry officials.

The EC's new thirst for natural gas imports (to reach nearly 50 percent of total energy consumption by 1990, up from 25 percent in 1980) will come as community domestic production falls and as its switchover from oil to other fuels picks up steam.

Several weeks ago, however, Norwegian Energy Minister Vidkunn Hveding emphasized that Norway will not be able to play a major role in fulfilling Western Europe's gas needs until the mid-1990s, even though the community, he said, ''cannot wait until the mid-1990s.''

At a press conference, Mr. Hveding turned aside US pleas for Norway to become the principal source of West European natural gas. He told reporters: ''We have said repeatedly that it is not technically feasible for us to become a major supplier (for Western Europe) until the mid-1990s, and I am a bit puzzled that the US insists on seeing us as an alternative (to the USSR).''

What Hveding neglected to mention was that Norway - boasting Western Europe's largest gas reserves - cannot help but come under even greater pressure to become ''a major supplier'' as the years roll by. Only 15 percent of the country's reserves are currently under development, Norwegian energy officials say.

The pressure, especially from the US, is certain to increase when gas from the Soviet Union begins to flow through the new pipeline, reaching about 40 billion cubic meters a year and increasing Soviet shipments from about 23 billion cubic meters annually.

Also certain will be the EC's continuing insistence that Western Europe not become overly dependent on Soviet gas. It will account for less than 4 percent of primary energy consumption even after the pipeline has been built, they point out.

Moreover, the EC argues that the need for Soviet gas will reach its peak between 1985 and 1990. After that, as one EC official put it, ''We may expect more diversification as other sources commence new supplies to the community.''

Those new ''sources'' will include Canada, Cameroon, Nigeria, Qatar, and Bahrain.

''Shipments from the USSR should level off, or even decline, after 1990,'' an EC energy expert said.

For the near future, as Energy Minister Hveding said: ''The Europeans need their gas now and cannot wait [for Norway or other alternative suppliers] until the mid-1990s.''